Skip to main content

Attack on the Tribal Middle Class, Part II

(Read part I and part III.)

Throughout most of the last twocenturies, the United States sought to eliminate the political existence of American Indian tribes. The federal anti-tribal agenda appeared through laws, policies and programs encouraging or forcing Indian assimilation into the American middle class. But by the late 1960s, federal policymakers finally realized that Indian people and polities were not going away.

Informed by federal “Indian self-determination” policy, in the 1970s Congress began enacting a slew of programs and laws committed to involving Indians in the development and implementation of reservation programs and services. As a result, the economic development of Indian Country finally commenced in earnest. The “distinct legal and economic market opportunities” derived from the “sovereign status of tribes,” as described by Drs. Joseph Kalt and Stephen Cornell, has since played the largest role in evolving the American Indian middle class discussed in Part I, into a reservation-based middle class—into a distinctly tribal middle class.

Indian self-determination, in practice, began with the reclamation of tribal resources. Although tribal peoples fished commercially for centuries, the practice fell victim to the “no special treatment” adage of the assimilation era. Then, in 1968, under the tribal threats of Treaty enforcement litigation, Oregon and Washington re-established an Indian-only commercial fishery in the Columbia River. Likewise, after decades of timber harvesting stymied by federal control and red tape, in the 1970s tribes themselves began to reap the economic benefits of high-yield timber harvesting. The Indian commercial fisherman and logger emerged, earning enough money to no longer have their families live hand-to-mouth, and, in some instances, to live quite comfortably.

Then came the arrival of what Blackfeet Indian attorney Debora Juarez dubs “tribal contraband economies.” As the 1970s progressed, tribes and tribal members began to leverage tribal sovereign status to create market opportunities in high-stakes bingo and retail tobacco and fireworks sales. The absence of state regulatory or taxation authority over such on-reservation markets was (and remains) the lynchpin to their success. Like tribal commercial fisherman and loggers, Indian gaming, tobacco and fireworks entrepreneurs began earning sufficient income for their families to join the growing on-reservation tribal middle class. In the process, the tribal private sector, comprised of individual Indian- and tribal family-owned businesses, emerged.

In reaction to such Indian success, in 1980, the U.S. Supreme Court handed down the Colville decision. In an economically racist opinion, the Court proclaimed that unless tobacco products derived from “value generated on the reservation” by activities involving Indians, states could tax the sale of those goods. After Colville, tribal “value generated” economies emerged—hundreds of millions of dollars over—most notably in the form of Indian-produced tobacco products. Tribal entrepreneurs also continued to sell various other retail goods tax free, appreciating that, as the Colville Court admitted, states cannot cross reservation lines to enforce intrusive tax laws. Both tribal value generated and contraband economies sustain the tribal middle class to this day.

Scroll to Continue

Read More

By the late 1980s, a Reagan Commission on Indian Reservation Economies found that federal procurement policy obstructed Indian-owned businesses from obtaining federal contracts being fulfilled on their own reservations. Changes to federal law ensued, exempting tribal corporations from “once in a lifetime” affiliation rules and caps on sole-source contracts. In the 1990s, tribal and Alaska Native businesses began venturing into the lucrative realm of federal “8(a) contracting” for construction, manufacturing, engineering, electronics, technology and other services. In turn, Indian corporate executives emerged, joining the insurgent tribal middle class.

Then of course there was, and is, Indian gaming. What began with high-stakes bingo on various reservations in the 1970s has since blossomed into a now steady $26 billion industry. Although Indian gaming has most certainly catapulted thousands of reservation Indian families out of poverty and into much higher income brackets, the new money of Indian gaming per capita distributions has created a unique, unemployed segment of the tribal middle class. In that limited way, some Indians, though of middle (if not upper) class income, may not have made the definitional “sacrifices to create a better life for themselves” discussed in Part One. Still, Indians reaping gaming per capita income help comprise the tribal middle class.

Most recently, Indian doctors, lawyers, engineers, scientists and other professionals, who received their higher or postgraduate education thanks to Indian self-determination programs and tribal scholarships funded by the proceeds of tribal gaming and other modes of self-sufficiency, are returning home and joining the tribal middle class.

Empirically, between the 1990 and 2000 Censuses, reservation Indian income levels rose by 33% and the poverty rate dropped by 7%, with little difference shown between those tribal governments with gaming operations and those without gaming. Tribal data from the 2010 Census will no doubt correlate to the $11 billion to $26 billion growth in Indian gaming from 2000 to 2010, and show even more dramatic income gains in Indian Country during the first decade of this 21st Century. As Indian self-determination firmly took hold, so too has a tribal middle class.

In Part Three, I will describe the rising attack on Indian economies vis-à-vis the tribal middle class and why that assault is far more consequential than the financial downfall suffered in all corners of the Great Recession economy. Instead, the attack is a telling indication of how past policies of assimilation and termination still motivate state and local governments’ as well as Congress’ behavior towards Indian Country; of how they see the existence of tribal governments and a strong tribal middle class as a zero-sum threat to the economic vitality of states and non-Indian businesses.

Gabriel S. Galanda, an enrolled member of the Round Valley Indian Tribes, is a partner with Galanda Broadman, PLLC, in Seattle. He represents tribal governments, businesses and members in all varieties of dispute and business dealing. Gabe can be reached at (206) 691-3631 or